It may take 10 or even 20 years, but the bank you know today is going away. For good. It will either reinvent itself from the inside out or simply disappear as a casualty of market forces. Digitisation continues to disrupt almost every area of financial
services. New market entrants are targeting customers as banks that aren’t actually banks go after your market share while others are still figuring out how to swallow the digital pill.
Empowered customers controlling the buying process are demanding new levels of personalised omni-channel experiences. But the goal posts keep moving. As the generations get younger, the gap between service levels and customer expectations keeps getting bigger
with some struggling to remain relevant on the information super high street.
Regulatory burdens are increasing the cost of capital, while macro-economic dynamics, such as low interest rates and restrictions limiting the ability to extract service fees and commissions from customers, hit profitability.
Legacy systems sitting in the quagmire of spaghetti landscapes built for pushing your bank’s products were never designed to cater to 21st century consumer lifestyle needs. With the value chain challenged by customers, and simultaneously hi-jacked by disruptors,
attempts at innovating often equate to well-meaning yet insular siloes.
If it’s properly understood, sensibly embraced, and well executed, then digitisation can transform traditional financial institutions not just to overcome, but to thrive. The change required is significant. But it can – and must – be done. Any action taken
must be in the context of a well thought out strategic roadmap. Or you’ll sink straight back into another silo. Think strategically. Make sure you understand the holistic elements of the new world order and the business model that supports it.
Speaking broadly, banks need to work on three key levels if they are to compete effectively – customer experience, collaboration (leveraging ecosystems, business networks and products from outside the group where they are a best fit for customer needs),
and agility, particularly with regards to response times of platforms, and decision-making capabilities. The recent SAP Financial Services Forum in London tackled this and other related issues head on. If you missed it, you can still get access to the critical
insights and advice from banks, insurance companies, fintech providers, challenger banks, and industry thought leaders by downloading the eBook:
“The digital evolution – As technology transforms financial services who will triumph”.
In my experience, financial institutions are well aware that they have a problem, but either underestimate the impact or simply don’t know where to start. Survival in this brave new world isn’t just about a change of technology platform or operating procedures.
It’s a complete change of mind-set - and a whole new world of possibilities ahead.